1. GAPS

3. DEFINITION Gap UP ………….High t < Low t+1 OR Gap DOWN…..…Low t > High t+1

5. GAPS COMMON GAPS BREAKAWAY GAPS RUNAWAY GAPS EXHAUSTION GAPS

6. COMMON GAPS OCCURS WHEN MARKET IS IN A TRADING RANGE RARELY SIGNIFIES ANY MAJOR CHANGE IN THE MKT. PRODUCT OF A SURPRISE GETS GENERALLY FILLED

8. BREAKAWAY GAPS USUALY OCCURS AFTER A CONSOLIDATION PHASE GAP WILL ACT AS SUPPORT AND RESISTANCE ONCE THE MARKET MOVES AWAY FROM IT WILL FUEL EVEN MORE AS TRADERS COVER THEIR SHORT/LONG POSITIONS IDEAL TO PLACE STOP OREDRS

10. RUNAWAY GAPS TRADERS WANT TO JUMP ONBOARD AND RIDE THE TREND VERY LITTLE OR NO PULLBACK TO ENTER THE TREND SEVERAL GAPS OCCUR PRICES ARE PUSHED UP/DOWN BY SHORT COVERERS

11. RUNAWAY GAPS

12. EXHAUSTION GAPS REPRESENTS END OF A STRONG TREND HIGH VOLUME + LARGE DIFERENCE BETWEEN PREVIOUS CLOSE AND CURRENT DAY'S OPEN HIGH VOLATILITY CLOSES LOWER THAN OPENING PRICE

13. EHHAUSTION GAP

14. TRADING THE GAP RUNAWAY GAP IF THERE IS A GAP UP AND THE CLOSE IS HIGHER THAN THE OPEN AND IS IN THE TOP HALF OF THE PRICE ENTER A LONG POSITION IF THERE IS A GAP DOWN AND THE CLOSE IS LOWER THAN THE OPEN AND IS IN THE BOTTOM HALF OF THE PRICE ENTER A SHORT POSITION

15. EXHAUTION GAPS MARKS THE END OF A TREND AND PROVIDES OPPORTUNITIES TO TRADE AGAINST THE TREND SELL THE UPGAPS AT THE OPEN BUY THE DOWNGAPS AT THE OPEN EXIT ON THE CLOSE USE A 5-POINT STOP LOSS

17. DOUBLE TOPS THE FAILURE RATE OF A DOUBLE TOP IS 65%, BUT WAITING FOR A CONFIRMATION CUTS IT TO JUST 17%

18. CONFIRMATION POINT

19. DOUBLE BOTOMS IN A DOUBLE BOTTOM, BOTTOMS CLOSE TOGETHER PERFORM BETTER

20. BROADENING FORMATIONS A PARTIAL DECLINE FROM A BROADENING TOP SIGNALS A UPWARD BREAKOUT 86% OF THE TIME

22. SYMMETRICAL TRIANGLES PULLBACKS FROM SYMMETRICAL TRIANGLES ARE MORE LIKELY TO OCCUR AFTER A HIGH-VOLUME BREAKOUT

24. TRIPLE BOTTOMS THE THIRD DOWN OF A TRIPLE BOTTOM PREDICTS PERFORMANCE. WHEN THE 3 RD LOW IS BELOW THE ABOVE BOTTOM IT IS MORE LIKELY TO OUTPERFORM

26. HEAD & SHOULDERS